Monthly Archives: January 2011
There has been quite a bit of chatter about the new 1099 reporting requirements for businesses beginning with expenses paid in 2012. There has been much less chatter about the 1099 reporting requirement that became effective for payments made on or after January 1, 2011 (yes, this year) for taxpayers who have rental income from real property rentals.
The Small Business Jobs Act of 2010 requires taxpayers who lease out rental real estate to issue 1099s to persons and corporations to whom taxpayers make payments totaling $600 or more in a year. Examples of covered payments include repairs, premiums, property and equipment, payments to accountants >:-( , etc.
Bottom line–starting this year, if you rent real estate you have to start tracking exact amounts paid to each vendor, collect a Form W-9 to obtain the vendor’s EIN and address, issue that vendor a 1099 at year end, and send a copy of the 1099s you issued to IRS.
Certain taxpayers are exempt from this 1099 reporting requirements. These exempt taxpayers include:
- individuals who can show that reporting is a hardship (good luck with this one)
- individuals who receive a minimal amount of rental income
- certain military personnel
- The IRS is expected to issue guidance on these exemptions.
Any tax advice contained in the body of this post was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. Any information contained in this post does not fall under the guidelines of IRS Circular 230.